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Gold Firmer On Corrective Bounce, Some Safe-Haven Demand

(Kitco News) - Gold prices are slightly higher in early U.S. trading Friday, getting a mild lift on a short-covering bounce from strong selling pressure Thursday and some fresh safe-haven buying interest. December Comex gold was last up $3.40 at $1,278.90 an ounce. Spot gold was last quoted up $1.10 at $1,278.00. December Comex silver last traded up $0.043 at $19.53 an ounce.

News reports as of this writing said a large convoy of Russian aid trucks had just crossed the border into Ukraine Friday. The reports said Ukraine officials are calling the convoy an invasion. This spooked the market place a bit as U.S. trading got under way. Gold, U.S. Treasuries and the U.S. dollar rallied early Friday on safe-haven demand, while the U.S. stock indexes were under mild pressure. Last week, some reports said a Russian convoy had crossed the border into Ukraine, and the Ukraine military engaged the convoy and destroyed part of it. However, the Russian military denied any encounter ever occurred.

Focus Friday is on the annual Kansas City Federal Reserve meeting in Jackson Hole, Wyoming, that began Thursday. This is arguably the economic highlight of the week, if not the month. The confab of world central bankers has in the past yielded important U.S. monetary policy speeches and clues to the direction of monetary policy. Fed Chair Janet Yellen and ECB President Mario Draghi are scheduled to speak on Friday in Jackson Hole. Many expect Yellen’s speech to favor the dovish camp on U.S. monetary policy. Draghi’s speech will also be extra important, given the recent troubling economic signals coming out of the European Union.

(Wyckoff’s Daily Risk Rating is your way to quickly gauge investor risk appetite in the world market place each day. Each day I assess the “risk-on” or “risk-off” trader mentality in the market place with a numerical reading of 1 to 10, with 1 being least risk-averse (most risk-on) and 10 being the most risk-averse (risk-off), and 5 being neutral.

The London A.M. gold fix is $1,281.00 versus the previous P.M. fixing of $1,275.25.

Technically, gold bears have the near-term technical advantage as a six-week-old downtrend is in place on the daily bar chart. Prices Thursday hit a two-month low. The gold bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,300.00. Bears’ next near-term downside breakout price objective is closing prices below solid technical support at $1,250.00. First resistance is seen at the overnight high of $1,283.90 and then at Thursday’s high of $1,292.00. First support is seen at Thursday’s low of $1,273.40 and then at $1,270.00.

December silver futures bears have the firm near-term technical advantage as prices hit a two-month low Thursday. A six-week-old downtrend is in place on the daily bar chart. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at $20.00 an ounce. The next downside price breakout objective for the bears is closing prices below solid technical support at $19.00. First resistance is seen at the overnight high of $19.625 and then at this week’s high of $19.765. Next support is seen at this week’s low of $19.355 and then at $19.25.

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